Any material alteration of a completed instrument whereby one's responsibility is increased is forgery, but the correction of the language where ungrammatical is not forgery. Since delivery is the final essential element to a negotiable instrument, so the forgery is not completed until delivery is made.

Where one adopts as his own a signature that is forged, it has generally been held that he assumes the liability of such party. The acceptor of a draft is estopped from denying the genuineness of the drawer's signature. One who issues paper is a guarantor of the genuineness and capacity of the previous parties.

In order to guard against forgery and fraud, the banker requires the drawer of a check to leave his signature with the banker when he becomes a depositor. This is to afford the banker an opportunity to compare signatures. The highest courts of the country have laid down the following rule: "The maker of a check is obliged to use all due diligence in protecting it; the omission to use the most effectual protection against alteration is evidence of neglect which renders him responsible for the fraudulent amount, the bank being liable only for genuineness of the signature, and ordinary care in paying the check." "When the drawer has drawn his check in such a careless and incomplete manner that a material alteration may be readily accomplished without leaving a suspicious appearance, he himself prepares the way for fraud, and if it is committed, he, and not the bank, should suffer."

203. QUESTIONS

What is a check? Illustrate its use. Explain post-dating. Name the parties to a check and compare with parties to a draft. When must a check be presented?

What is certification? What difference does it make if procured by the drawer or a holder? Why this distinction? What three things does it admit.

What is a certificate of deposit? How does it differ from an ordinary deposit?

What is a forgery? What effect has alteration on one's liability? What two things must be present to constitute forgery?

What is a voucher check? What is a cashier's check?

1. In S v. G, 85 A 281 (R. I.), the ordinary relation of banker and depositor on a general deposit is that of debtor and creditor.

2. In P v. N. B, 151 S. W. 774 (Mo.), where a depositor presented a check for deposit, he and the bank could agree that payment should be deferred for a reasonable time until the bank ascertained whether there were sufficient funds of the drawer to pay it.

3. In B v. C, 126 P 886 (Wyo.), a check is usually defined to be a draft or order on a bank for the payment, at all events, of a certain sum of money to a person or his order, or to bearer, payable instantly on demand.

The payment of a check may be stopped or countermanded at any time before it is actually presented and paid; but the drawer assumes the consequences of his act in so doing.

4. In B v. G, 126 P 498 (Col. App.), an order drawn by one on his deposit in a savings bank, which, though on its face payable on demand, was, by reason of a requirement of the bank, not to be paid till after 30 days' notice to it, and, by condition of the deposit, required presentment with it of the depositor's pass-book, of which fact its indorsee had notice, is merely a non-negotiable chose in action.

5. In H v. T, 99 N. E. 305 (Ohio), it is not negligence per se for a bank which has received a certificate of deposit for collection to send it by mail to the issuing bank for payment, where such is the custom and there is no other bank where the certificate is issued.

205. Introduction. The essential part of an indorsement is the signature of the indorser. The usual signature of the indorser should be given. If the name of the payee is incorrectly spelled, the indorser should write it as given and then follow it by his proper signature, also indicating that both signatures are in fact but one. Any writing showing the intent of the indorser is sufficient. Whatever extra writing is used other than the signature must be words of transfer or the special character of the indorser's contract. In conclusion, the indorsement must be by the payee, his agent, or subsequent holder, and must follow the tenor of the instrument. It accomplishes two things-it transfers the title, and it carries with it the law merchant liability of the indorser. The indorsement should be written crosswise on the

back of the paper-the first one at the left end, the others in order.

The law merchant does not permit of a partial indorsement. The indorsement is completed by delivery.

206. Kinds of Indorsements. There are several kinds of indorsements; viz., blank, full, qualified, restrictive, conditional, waiver, guarantee, and O. K. The first two are in general use, the others are not so frequently used.

1. Blank. This indorsement consists simply in writing the signature of the indorser on the back of the paper. A blank <space should be left above the signature. The instrument is now payable to bearer, as the holder's name is not designated. If lost or stolen, it might be put into circulation to the loss of the proper owner. The paper may now be passed from hand to hand by mere delivery; however, an indorsement should be demanded, for each indorser adds credit to the instrument. If no indorsement is required, the transferrer assumes only the common law liabilities which extend to the receiver only.

2. Full. An indorsement in full includes the names of both the indorser and the indorsee. Negotiable words are not necessary. If the instrument is negotiable it will continue so until the words. expressly denying this appear in some indorsement. Blank indorsements may be filled out and thereby become indorsements in full. Writing may be added to an indorsement provided it does not change the liability of the indorser. If there are several indorsements in blank, the last holder may make any indorsement, one in full, and reject the following ones; or he may fill out each one so as to show a record of full indorsements from the payee to the present holder. An indorsement in full cannot be changed by a subsequent party to one in blank. Blank and full indorsements are known as absolute indorsements. The liability of the indorser is subject to demand and to the usual protest and notice of the same.

3. Restrictive. If the holder desires to transfer, yet wishes. to restrict the circulation of the paper, it may be accomplished

by showing such intention in his indorsement. The usual form is to name the indorser and use the word "only." The object of such an indorsement frequently is to vest the title in one for the benefit of a third person, or to show that the indorsee is simply an agent of the indorser. Any subsequent transfer would be subject to the law of assignability.

4. Qualified. In this indorsement the indorser escapes the liability as known to the law merchant, in that he does not guarantee the payment of the paper. He cannot thus escape the common law liability. The usual form is to include the words "Without recourse," written above the indorser's signature. The indorsement may be either in full or in blank. If one holds a note secured by a mortgage and wishes to negotiate the note, he generally uses the qualified indorsement, as the mortgage is sufficient security.

5. Conditional. In a conditional indorsement the holder parts with possession, but does not pass a full title to the indorsee. The condition may be either precedent or subsequent: as, "Pay to A when he arrives at 21 years of age"; "Pay B unless I give you notice not to pay."

6. Waiver. An indorsee may not desire to accept a transfer of the instrument unless the indorser is willing to waive some of the requirements incident to making the liability of the indorser absolute, and, if so, he demands a waiver indorsement. The usual form is, "Demand, protest and notice waived," following this with his signature. The object is to avoid the necessity of protesting.

7. Guarantee. This is an indorsement frequently given, in which the indorser guarantees the prior indorsements. It is frequently used by banks.

A re

8. O. K. This is an indorsement of identification. ceives a check from B. If A is not acquainted at the bank and has no means of furnishing identification, he asks B to O. K. the check. B does this by writing the letters O. K. above his signature on the back of the check. Any one may now secure the money from the bank, but he is requested, however, to indorse